Managing your credit scores and keeping them high enough to qualify for a home loan can be easy if you have always had good credit, and challenging if you have had some blemishes. 
Recent tallies show a third of U.S. credit scores are below 649. Many lenders will lend down to a score of 580 for FHA and VA, and 620 for Fannie/Freddie.
However, acquiring a mortgage might be more difficult and more expensive at those lower levels than with higher scores.
Here are the fundamentals to guide you in establishing and maintaining a healthy and legitimate credit score.
The Somewhat Obvious:
- Borrow only what you can afford to pay
- Make all of your payments on time
- Avoid excessive requests or inquiries for credit
- Have an emergency account to pay for unexpected expenses
- Check your report annually to contest and remove any erroneous information
The Not So Obvious:
Do not open new store credit cards just to save on a purchase. New accounts can lower your score and too many payments can be difficult to manage. Saving 10% on a $300 department store purchase means little if it costs you even just fractionally more on a $300,000 home loan.
Do not close old accounts. If you have a good record of payments on old accounts, these will benefit your score. Using them occasionally and conservatively will keep them active and contribute toward a good score.
Do not be afraid to use credit. Without the use of credit, you may have no score and that can be just as bad as a low one.
Keep a high credit line but a low balance. Credit utilization ratios measure this relationship, and the lower the ratio the better. Maxed out accounts lower your scores.
Maintain a variety of account types. A combination of revolving, installment and secure financing along with excellent records of payment will yield a higher score. Still, don't run out and open an account just to have diversity as this is the least influential factor.
Remember, contact me if you have questions, I am here to help.
